Binance Coin: What this bullish pattern being in play means for traders
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
With Bitcoin unable to topple its $50k price ceiling, the altcoin market has had a quiet week, save for a few exceptions. Binance Coin, like most of its counterparts, has had to grapple with selling pressure of late. A descending channel accurately charted out BNB’s downswing in value, one characterized by lower highs and lower lows.
Even so, the larger uptrend the alt seemed to be noting might just inspire a northbound move. At the time of writing, BNB was valued at $474, up by 2% over the last 24 hours.
Binance Coin 4-hour Chart
BNB’s down-channel, which emerged after the price snapped a swing high of $517.7, has been active for a week. Since the pattern emerged on the back of a strong uptrend, the setup can be expected to play out as a continuation pattern. An impulsive move above BNB’s last swing high of $481.1 would heighten chances of an upswing, while a throwback between $487-$480 would also play out favorably for the bulls.
Once the breakout is complete, targets can be set at $540. This would identify as 13% jump from BNB’s press time price.
If a hike above the upper trendline is denied and BNB’s channel dips close to $437.6, the price would be in danger of further drawdowns since the move would welcome short-sellers.
The RSI noted an important development. The index, trading within a down-channel of its own, witnessed a breakout at press time. This meant that there was room for the RSI to extend its climb – Something that could spur buying in the market.
The Awesome Oscillator posed a series of green bars and eyed a comeback above its half-line. This suggested that another buy signal was in the offing.
Finally, the Directional Movement Index also approached a bullish crossover between the +DI and -DI lines. However, the ADX reading of 18 needs to pick up if BNB wishes to maintain its momentum.
Although Binance Coin seemed to be gearing for a down-channel breakout, it is too early to call for a bullish outcome. The 24-hour trading volumes and ADX must be observed carefully moving forward as this would provide more insight for a price swing.
Traders can play safe and long BNB only after the price closes above $481 and set their take-profits at $540.